First, it denied certiorari in a case involving personal jurisdiction based upon Internet activities (ALS Scan v. Digital Services Consultants). Second, the Supreme Court denied certiorari in a copyright case involving the fair use defense (Ty v. Publications International).

Finally, the Supreme Court issued an order in the Intel v. Advanced Micro Devices. It stated, in part, that "The Solicitor General is invited to file a brief in this case expressing the views of the United States." See, stories below.

Advanced Micro Devices (AMD) filed a complaint with the Directorate General-Competition of the European Commission alleging that Intel violated Article 82 of the EC Treaty, which prohibits "abuse by one or more undertakings of a dominant position within the common market." AMD then sought discovery from Intel under 28 U.S.C. § 1782, which provides that "The district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal ..."

AMD sought documents from Intel pertaining to another antitrust action in the U.S. against Intel (Intergraph case). Intel objected. AMD sought to compel discovery in the U.S. District Court (NDCal). The District Court held that the EC action was not a proceeding within the meaning of Section 1782. AMD appealed.

The Court of Appeals stated that Section 1782 is broad and inclusive and includes quasi judicial and administrative bodies, and preliminary investigations leading to judicial proceedings. It held that "the EC is an administrative body and that the investigation being conducted by its Directorate is related to a quasi- judicial or judicial proceeding. AMD has the right to petition the EC to stop what it believes is conduct that violates the EC Treaty, to present evidence it believes supports its allegations, to have the EC evaluate what it presents and to have the resulting action (or inaction) reviewed by the European courts. Although preliminary, the process qualifies as a ``proceeding before a tribunal´´ within the meaning of 28 U.S.C. § 1782."

Moreover, the Appeals Court held that Section 1782 does not "require a threshold showing on the party seeking discovery that what is sought be discoverable in the foreign proceeding." The Appeals Court reversed and remanded to the District Court.

The case has attracted outside attention. For example, the U.S. Chamber of Commerce filed an amicus curiae brief. It argued that "Under the Ninth Circuit's ruling, any company that operates abroad can obtain nearly unlimited access to the business documents and competitive plans of its business rivals by filing a complaint with the European Commission and then seeking discovery under 28 U.S.C. § 1782. Under the Ninth Circuit's decision, the company is allowed this discovery without taking on any costs or risks of litigation, even though the discovery is not necessary to the decisionmaking of the Commission. By breezing past the statutory requirements that limit Section 1782 discovery to an "interested person" "for use in a proceeding in a foreign or international tribunal" and ignoring the discovery rules of the European Commission, the Ninth Circuit's ruling, if not reviewed by this Court, would open the door to businesses seeking to harass and obtain sensitive information from their U.S.-based rivals by exploiting the liberal discovery rules of the United States."

Perhaps the Solicitor General himself, Ted Olson, will not file the brief. Prior to his appointment as Solicitor General, he was a partner in the law firm of Gibson Dunn & Crutcher, which represents AMD in this case. O'Melveny & Myers represents Intel.

ALS Scan is a Maryland corporation with its place of business in Columbia, a Maryland suburb situated between Washington DC and Baltimore. ALS Scan is in the business of taking girly pictures, which it then markets over the Internet. ALS Scan alleges that Alternative Products and Robert Wilkins copied some of its photographs, and published them in their web sites for commercial gain. Digital Service Consultants is an ISP in Georgia that provides web hosting services to Alternative Products and Wilkins.

ALS filed a complaint in U.S. District Court (DMd) against Digital, Alternative, and Wilkins alleging copyright infringement. Digital filed a motion to dismiss for lack of personal jurisdiction. Digital alleged that it has no office or customers in Maryland, that it derives no revenues from Maryland, and that it does not advertise in Maryland, except by having a web site. The District Court granted Digital's motion to dismiss for lack of personal jurisdiction. ALS filed this interlocutory appeal. The Court of Appeals affirmed.

The Appeals Court hinted that Supreme Court review might be appropriate. It wrote that "Until the due process concepts of personal jurisdiction are reconceived and rearticulated by the Supreme Court in light of advances in technology ..." However, the Supreme Court did not take the hint. It denied certiorari.

See also, stories titled "Internet Shoes: Two Appeals Courts Address Internet Based Personal Jurisdiction", "Fourth Circuit Holds No Personal Jurisdiction Over Out of State Web Host", and "DC Circuit Suggests Personal Jurisdiction Over Out of State Online Brokerage", all published in TLJ Daily E-Mail Alert No. 452, June 17, 2002.

There have also been several more recent cases addressing personal jurisdiction based upon Internet contacts. On January 9, 2003, the U.S. District Court (CDCal) issued an opinion in MGM v. Grokster in which it denied Sharman Network's motion to dismiss for lack of personal jurisdiction. Sharman, which now owns the key assets of Kazaa, is organized in Vanuatu. Sharman provides free software, known as the Kazaa Media Desktop (KMD), that can be downloaded and used to search for and exchange digital music, movies, and other mostly copyrighted works, using FastTrack file sharing technology. The Court based its finding of personal jurisdiction largely on the fact that Sharman had made the KMD software available to about two million residents of California. See, story titled "District Court Squeezes Sharman on Internet Based Personal Jurisdiction" in TLJ Daily E-Mail Alert No. 581, January 13, 2003.

On December 10, 2002, the High Court of Australia issued its opinion in Dow Jones v. Gutnick, a case involving personal jurisdiction and other procedural issues in a tort action brought in Australia for an allegedly defamatory news story published on the Internet by Dow Jones, a U.S. publisher. The Court held that because of publication on the Internet, the Australian courts have jurisdiction. See, story titled "High Court Rules Australia Has Jurisdiction Over Dow Jones Based on Web Publication", TLJ Daily E-Mail Alert No. 564, December 10, 2002.

On December 13, 2002, the The U.S. Court of Appeals (4thCir) issued its opinion [12 pages in PDF] in Young v. New Haven Advocate, holding that a court in Virginia does not have jurisdiction over two small newspapers, and their editors and reporters, located in Connecticut, who wrote allegedly defamatory stories about a Virginia prison warden and published them on the Internet. The Court held that the web publication did not establish minimum contacts because the newspapers are not directed at a Virginia audience. See, TLJ story titled 4th Circuit Rules in Internet Jurisdiction Case.

At the FTC Cruz has been active in studying and advocating the reduction of unnecessary regulatory barriers to electronic commerce. In his new job in Texas, he will represent a state known for imposing barriers to e-commerce. Texas ranked 31st in the Progressive Policy Institute's statistical study [huge PDF file] titled "The Best States for E-Commerce". This March 2002 study rated Texas low in particular for its regulatory barriers to Internet based sales of automobiles and wine, and mortgage lending.

He testified on September 26, 2002, at the House Commerce Committee's Subcommittee on Commerce, Trade and Consumer Protection hearing titled "State Impediments to E-Commerce: Consumer Protection or Veiled Protectionism?" See, prepared testimony.

He co-signed a letter from the FTC and Department of Justice (DOJ) to the American Bar Association (ABA) regarding the ABA's proposed definition of the practice of law. One of the issues addressed in this long letter was the impact on e-commerce. This letter stated that "In addition to the significant restrictions on consumer choice and increases in consumer costs that flow from an overly broad definition of the practice of law in the non-electronic realm, such restrictions are also likely to impede substantially the growth of e-commerce and software-based solutions. The Internet is changing how many goods and services are delivered, and consumers benefit from the increased choices and convenience and decreased costs that the Internet can deliver. Yet over-broad restrictions on the practice of law can impair the growth of e-commerce by (1) prohibiting or increasing the costs of electronic provision of forms or other legal self-help computer programs, (2) negatively impacting Internet mortgage lenders who rely on lay real estate closers, and (3) restricting the ability of providers to experiment and develop new forms of Internet services touching on legal matters that could benefit consumers directly."

He co-signed a comment to the state of Connecticut on March 27, 2002, criticizing state bans on sales of contact lens by out of state vendors as unnecessary to protect health, and an impediment to e-commerce. He co-signed an amicus curiae brief [PDF] filed with the U.S. District Court (Okla) in a case filed by an Internet based casket retailer against the state of Oklahoma challenging the constitutionality of Oklahoma's Funeral Services Licensing Act. Cruz also helped organize a workshop at the FTC on October 8 through 10, 2002, titled "Possible Anticompetitive Efforts to Restrict Competition on the Internet". See, workshop web site, with links to testimony of participants.

Before his appointment at the FTC, Cruz was briefly Associate Deputy Attorney General at the Department of Justice. Before that, he was a Domestic Policy Advisor on the Bush Cheney campaign. He also assisted in the preparation of briefs for the U.S. Supreme Court and Florida Supreme Court on behalf of George Bush during the Florida election contest. Before that, he was an associate at the Washington DC law office of Cooper Carvin & Rosenthal. He also clerked for Judge Mike Luttig (4th Cir) and Chief Justice William Rehnquist.

The two groups argue in the letter that "Congress has a simple choice to make: either regulate the Bell's wires to promote competition by preserving unbundled network element (``UNE´´) pricing and availability, or deregulate at the wholesale level, allowing the Bells to expand their local market dominance into long distance. If you choose the latter course, it is virtually certain that the vast majority of consumers will never see meaningful competition for their local and long distance needs, and therefore the states and FCC will need to regulate to prevent inflated prices and discriminatory practices."

They added that "The only thing that Congress must not permit is the path that appears to be favored by Chairman Powell-deregulation of the Bell monopolies -- a path that short-circuits local competition in violation of the Act without any protection for consumers. That would be the worst of both worlds -- no regulation to protect consumers and no competition to keep prices and service quality in check."

Sen. Grassley (at right) wrote that Bowman "who is in charge of the FBI's National Security Law Unit, has a great deal of authority at the FBI over the use and processing of warrants sought under the Foreign Intelligence Surveillance Act (FISA), one of the FBI's most important tools against terrorists." Sen. Grassley continued that Bowman had played a role in denying the request for a FISA warrant for Zaracarias Moussaoui prior to the terrorist attacks of September 11, 2001.

Sen. Grassley concluded that "By granting this award and a monetary bonus, you are sending the wrong signal to those agents who fought -- sometimes against senior FBI bureaucrats at headquarters -- to prevent the attacks. This also fits with a disturbing pattern of rewarding wrongdoing or mistakes by top officials at the FBI that I hoped would end during your tenure. Also, you have said that the FBI must admit its mistakes, but it seems that is not happening in this case."

Sen. Grassley is a senior member of the Senate Judiciary Committee, which oversees the FBI and Department of Justice.

The bill would do several things. First, it would  require that certain information be placed on the labels of music discs, and that a violation would constitute an unfair or deceptive trade practice within the meaning of the Federal Trade Commission Act. However, this is not the more important part of the bill. It does serve, however, to give the House Commerce Committee primary jurisdiction. The House Judiciary Committee, which has jurisdiction over intellectual property issues, is more protective of the interests of intellectual property owners.

Second, and more importantly, the bill would roll back the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA). Specifically, it would create fair use exceptions to the bans on circumvention of technological measures to protect copyrighted works. It would also provide an exception for scientific research into technological protection measures.

Rep. Boucher (at right) discussed his bill in a statement that he submitted for the Congressional Record of January 7. He said that "The Digital Millennium Copyright Act of 1998 (DMCA) tilted the balance in our copyright laws too heavily in favor of the interests of copyright owners and undermined the longstanding fair use rights of information consumers, including research scientists, library patrons, and students at all education levels. With the DMCRA, we intend to restore the historical balance in our copyright law that has served our nation well in past years."

The bill is also cosponsored by Rep. Spencer Bachus (R-AL) and Rep. Patrick Kennedy (D-RI). See also, Rep. Boucher's release, short summary, and section by section analysis of the DMCRA.

Explanation of Key Fair Use Provisions of Bill. Currently, § 1201(a)(1)(A) of the Copyright Act, which was added in 1998 by the DMCA, provides that "No person shall circumvent a technological measure that effectively controls access to a work protected under this title." See, 17 U.S.C. § 1201.

Then, § 1201(a)(2)(A) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that --- (A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;"

Furthermore, § 1201(b)(1)(A) provides that "No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that --- (A) is primarily designed or produced for the purpose of circumventing protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof;"

The Boucher Doolittle bill would add to both of these sections an exception for scientific research. Specifically, the bill provides that "Subsections (a)(2)(A) and (b)(1)(A) ... are each amended by inserting after ‘‘title’’ in subsection (a)(2)(A) and after ‘‘thereof’’ in subsection (b)(1)(A) the following: ‘‘unless the person is acting solely in furtherance of scientific research into technological protection measures’’."

Then, there is the critical part of the bill. Currently, § (c)(1) provides that "Nothing in this section shall affect rights, remedies, limitations, or defenses to copyright infringement, including fair use, under this title."

The Boucher Doolittle bill would add to this sentence the following phrase: "and it is not a violation of this section to circumvent a technological measure in connection with access to, or the use of, a work if such circumvention does not result in an infringement of the copyright in the work".

Also, the bill would add to § (c) the following new subparagraph: "(5) It shall not be a violation of this title to manufacture, distribute, or make noninfringing use of a hardware or software product capable of enabling significant noninfringing use of a copyrighted work."

Reaction. Rep. Boucher released a list of supporters of the bill. It includes corporations, such as Intel, Sun Microsystems, Philips, and Verizon. It also include library and university groups. Finally, it includes groups more focused on digital copyright issues such a Public Knowledge.

The bill also has its critics. For example, Business Software Alliance (BSA) VP for Policy Robert Cresanti stated in a release that "We have important reservations, however, about the changes his bill would make to the anti-circumvention provisions of the Digital Millennium Copyright Act. The DMCA provides important tools in the fight against piracy. We fear that broad exemptions to the DMCA could undermine the core purpose of the Act -- that technological measures can have an important and proper role in curbing piracy. Our principal reservation is that the bill could make it harder for software companies to take action against pirates."

Sen. Edwards spoke in the Senate in support of this bill. He said that "In the event of a terrorist attack or natural disaster, Americans must know how to respond. In the first terrible hours on September 11, 2001, in Washington, in New York, and across the country, most of us didn't know what to do." He said that "the first thing we need to do is to update our emergency warning system." See, Cong. Rec., January 9, 2002,  at S153-4.

Sen. Edwards (at right) issued a release that states that "The Commerce Department would be responsible for developing new technologies to issue warnings, modeled on the existing system used by the department's National Weather Service. Commerce also would oversee research into new tools for disseminating warnings to more people, including the Internet, cell phones, special rings on traditional telephones and new television technology to activate sets that are not turned on." Sen. Edwards also released a summary of the bill which contains similar language.

He also elaborated in his Senate statement that "There are a lot of things the system could do using existing technology. For example, it could alert Americans in their homes through a special phone ring. These warnings could reach people as they sleep in their homes. For people on the move, the system could use cell phones, which can already be programmed to broadcast emergency warnings to all users in a certain area -- even if those folks are just passing through. Pagers and beepers can achieve the same result. Televisions can be programmed to come on automatically and provide alerts in the event of a disaster."

The National Weather Service (NWS) is a part of the National Oceanic and Atmospheric Administration (NOAA) which is a part of the Department of Commerce (DOC). However, the Emergency Alert System (EAS) is controlled by the Federal Communications Commission (FCC), which is independent of the DOC.

The U.S. for a long time had an Emergency Broadcast System (EBS). It was replaced in 1994 by the Emergency Alert System (EAS). The EAS is covered by Part 11 of the Rules of the FCC. See, 47 C.F.R. §§ 11.1, et seq. Currently, all broadcast stations, cable systems and  wireless cable systems are required to install EAS equipment, although there is an exception for nonparticipating national sources.

The FCC updated its EAS rules in February of 2002. See, Report and Order in the proceeding titled "In the Matter of Amendment of Part 11 of the Commission's Rules Regarding the Emergency Alert System". This is EB Docket
No. 01-66. In its discussion of programmed channels of wireless cable systems the FCC's Report and Order makes clear that "Programmed channels do not include channels used for the transmission of data services such as Internet."

Rep. Honda (at right) stated in a release that "The nanotechnology industry could become one of the new engines of our economy, and will have a dramatic impact on society ... It is of utmost importance that the United States lead in the development of the nanotechnology industry. My legislation will make sure that the federal government has an aggressive, achievable, and measurable plan."

The bill provides that "There is established the Nanoscience and Nanotechnology Advisory Board (in this Act referred to as the ``Advisory Board´´). The Advisory Board shall operate in coordination with the White House Office of Science and Technology Policy, and shall provide advice to the President and the National Science and Technology Council on research investment policy, strategy, program goals, and management processes relating to nanoscience and nanotechnology."

The bill is cosponsored by Rep. Sheila Lee (D-TX), Rep. Ellen Tauscher (D-CA), Rep. Rush Holt (D-NJ), Rep. Eddie Bernice Johnson (D-TX), Rep. Joe Hoeffel (D-PA), Rep. Zoe Lofgren (D-CA), and Rep. Bob Etheridge (D-NC).

1/8. Rep. Heather Wilson (R-NM) introduced HR 329, a bill to authorize the Secretary of Education to make grants for regional workshops designed to permit educators in elementary and secondary schools to share strategies for mathematics and science instruction. It was referred to the Committee on Education and the Workforce.

1/9. Sen. Jon Kyl (R-AZ) introduced S 113 and S 123, bills to exclude United States persons from the definition of "foreign power" under the Foreign Intelligence Surveillance Act (FISA). The bills were referred to the Senate Judiciary Committee, of which he is a member.

1/9. The U.S. Court of Appeals (FedCir) issued its opinion [MS Word] in Oakley v. Sunglass Hut, a patent infringement case involving the sunglasses lens technology. The U.S. District Court (CDCal) granting Oakley a preliminary injunction on its claim of infringement of its U.S. Patent No. 5,054,902. The Appeals Court affirmed.

1/9. The U.S. District Court (DC) issued a Memorandum Opinion [PDF] in McPeek v. Ashcroft regarding discovery of electronic evidence. See also, McPeek v. Ashcroft, 202 F.R.D. 31 (D.D.C. 2001).

1/9. The U.S. Court of Appeals (8thCir) issued its opinion [11 pages in PDF] in Daimler Chrysler v. Bloom, a trademark case involving the licensing of 1-800 numbers. Bloom is a former Mercedes dealer who used the vanity number 1-800-637-2333. This is one of many numbers that corresponds to 1-800-MERCEDES. He is no longer a Mercedes dealer, but his licensing company, MBZ, licenses use of this number to Mercedes dealers around the country for use in their area codes. Daimler Chrysler and Mercedes filed a complaint against Bloom and MBZ in U.S. District Court (DMinn) alleging that this licensing violates the Lanham Act, the Federal Trademark Dilution Act, and state trademark and unfair competition laws. The District Court granted summary judgment to Bloom and MBZ. The Appeals Court affirmed. It held that "the licensing of a toll-free telephone number, without more, is not a ``use´´ within the meaning of the Lanham Act, even where one possible alphanumeric translation of such number might spell-out a protected mark."

1/9. The U.S. Court of Appeals (9thCir) issued its opinion [PDF] in Homedics v. Valley Forge Insurance Company, a case regarding an insurer's duty to defend its insured in a patent infringement case under a commercial general liability policy, with personal injury and advertising injury clauses. Homedics was sued for patent infringement. Homedics file two actions in U.S. District Court (CDCal) against various insurers for breach of contract, and for a declaration of duty to defend. An insurer filed a Rule 12(b)(6) motion to dismiss for failure to state a claim. The District Court granted the motion. Homedics appealed. The Court of Appeals affirmed. Patent infringement claims are not an advertising injury.

9:30 AM. The Senate Governmental Affairs Committee will hold a hearings on the nomination of Tom Ridge to be Secretary of Homeland Security. Location: Room 342, Dirksen Building.

The U.S. Court of Appeals (DCCir) will hear oral argument in Peninsula Communications v. FCC, No. 01-1273. Petitioner is a radio broadcaster operating on the Kenai Peninsula in south central Alaska. Judges Henderson, Randolph and Garland will preside. Location: 333 Constitution Ave., NW.

Deadline to submit comments to the USPTO to assist it in writing a report to the Congress regarding technological protection systems for digitized copyrighted works and to prevent infringement. This report is required by the Technology, Education and Copyright Harmonization Act of 2002 (TEACH). See, notice in the Federal Register, December 9, 2002, Vol. 67, No. 236, at Pages 72920 - 72921. For more information, contact Michael Shapiro at 703 305-9300 or teach.act@uspto.gov.

10:00 AM. The Office of Personnel Management (OPM) will hold a launch event for its new government wide payroll program titled e-Payroll. RSVP to Rusty Asher at 202 606-2402. Location: OPM, The Pendleton Room, Theodore Roosevelt Building, 1900 E Street, NW.

Deadline to submit comments to the NIST regarding it plans to disseminate new data regarding condensed phase infrared spectra through the Internet. See, notice in the Federal Register, December 16, 2002, Vol. 67, No. 241, at Page 77053.

12:15 PM. The FCBA's Young Lawyers Committee will host a brown bag lunch. The topic will be planning for the new year. For more information, contact Yaron Dori at ydori@hhlaw.com or Ryan Wallach at rwallach@willkie.com. Location: Hogan & Hartson, 555 13th St., NW, Confr. Rm. 9E-407.

The FCBA's Diversity Committee and Young Lawyers Committee will host a series of Law School Outreach Programs for law students interested in practicing communications law at Washington DC area law schools. The event at American University will be held at 4:30 PM. The event at Catholic University will be a 6:00 PM. The event at George Mason University will be at 4:45 PM. The event at Georgetown University Law Center will be at 5:30 PM. The event at Howard University will be at 4:30 PM.

The Securities and Exchange Commission's (SEC) final rule providing relief for Internet investment advisers goes into effect. The rule exempts certain investment advisers who provide advisory services through the Internet from the prohibition on SEC registration. The rule change permits advisers whose businesses are not connected to any state to register with the SEC instead of with state securities authorities. See also, notice in Federal Register, December 18, 2002, Vol. 67, No. 243, at Pages 77619 -77626, and story titled "SEC Amends Rule for Internet Investment Advisers" in TLJ Daily E-Mail Alert No. 568, December 16, 2002. For more information, contact Marilyn Barker or Jamey Basham 202 942-0719.

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